Scotland faces second budget black hole over £3.5bn benefits bill

Scotland may be facing a second black hole in its budget after the country's economic watchdog warned the predicted £3.5 billion benefits bill could be "significantly" out.
MSPs will take control over a raft of new benefits next yearMSPs will take control over a raft of new benefits next year
MSPs will take control over a raft of new benefits next year

Holyrood is to take control of a raft of new benefits such as Attendance Allowance, Disability Living Allowance and Personal Independent payments next year.

Read More
Read more: Tax rises forecast as Scotland faces £1bn spending black hole

It comes after the Commission warned last week that Holyrood's devolved budget is facing a £1 billion spending black hole over the next three years over a shortfall income tax levels.

Hide Ad
Hide Ad

"Forecasting social security benefits is difficult," said Commission chief executive John Ireland.

"I would expected there to be some significant forecast errors - I can't say which way but it's a pretty uncertain forecast."

Mr Arthur asked whether the Commission could set out the potential "percentage" for errors to provide an idea of the likely impact.

But commission member Professor Alasdair Smith added: "I don't think we're in a position to do that but it's one of the highlights of our report that we think the social security budget of £3.5 billion, with the possibility of eligibility changes coming into that, is a sum of money with a high degree of risk.

"That's one of the highlights of our report - we're drawing attention to the fact that there's a very significant fiscal risk in this."

Related topics: